Atlanta Federal Reserve Bank President Dennis Lockhart lamented the "disappointing" nature of the U.S. recovery Tuesday but gave no hint he is prepared to pump more money into the economy as yet.
Lockhart, a voting member of the Fed's policymaking Federal Open Market Committee, warned that it could be risky for the Fed to try to stimulate the economy "too aggressively" amid "fundamental imbalances" and a need for fiscal policy reform.
Lockhart echoed Fed Chairman Ben Bernanke saying monetary policy is not "a panacea" in remarks prepared for the Latin American Chamber of Commerce and the World Affairs Council.
Most of Lockhart's speech was about Latin America, and he hailed the progress the region has made in improving its policies and thereby strengthening economic growth.
He sounded far less upbeat about the struggling U.S. economy.
Lockhart noted that "the U.S. economy has been in a technical recovery since the summer of 2009," but that "the recovery to date has seen weak growth and persistently high unemployment."
"By any number of measures, the strength of the recovery has been and remains disappointing," he said.
Lockhart even alluded to commentators who have suggested that the United States, like Japan before it, "could be experiencing our own lost decade."
He observed that real personal income (excluding government transfer payments) is "still 1.5% below what it was before the recession in late 2007," and that "as of July, there are more than 4 1/2 million fewer payroll jobs than in November of 2007."
"Most of these job losses were in the private sector," he went on, adding, "the share of unemployed workers who have been out of a job for more than 27 weeks has fluctuated between 40% and 50% over the entire course of the recovery."
Lockhart suggested that this weakness is not necessarily amenable
to additional monetary stimulus.
"I think this condition can be attributed, at least in part, to fundamental imbalances that have not yet been corrected, a situation that presents formidable challenges for monetary policymakers," he said.
"There is a risk to monetary policy being employed too aggressively and without effect to address economic problems that can be resolved only by fiscal reforms that involve making tough choices about the allocation of public resources," he continued.
"Monetary policy can exert a powerful positive influence on an economy, but as Chairman Bernanke has pointed out, monetary policy is not a panacea," he added.
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